In late February, private Internet service provider, Countrywide Broadband (CWB), announced that it and Seaport Capital together would acquire assets belonging to iTV-3, Inc. In addition to fiber networks developed in Peoria, Bartonville, and Bloomington, iTV-3 is deeply involved in bringing connectivity to the Urbana-Champaign community. The company leases fiber on the UC2B network, has expanded the network by deploying its own fiber off the UC2B fiber rings, and promised to expand the Fiber-to-the-Home (FTTH) network across the community.

In the agreement with iTV-3, the UC2B nonprofit has a right of first refusal to purchase any local iTV-3 assets deployed if iTV-3 is purchased by another company. In short, UC2B has 60 days from the date of the CWB and iTV-3 purchase agreement to decide if they want to purchase the iTV-3 fiber expansions. If the nonprofit decides not to purchase the fiber, it will continue to own the UC2B rings and CWB will own the expansion fiber.

It was only a few weeks ago that we wrote about the upcoming sale of Bristol's BVU Optinet. It is important for communities to recognize that as these networks are built, they are targets for purchase and consolidation. Fiber networks are a hot commodity and local governments may be tempted to plug short term financial problems with a sale that has implications for decades – long after those elected officials have left office. 

They Chose iTV-3

The open access (FTTH) network, one of the few last-mile projects awarded funding during the first round of the American Recovery and Reinvestment Act (ARRA), cost $26 million to deploy. The network offered affordable access to residents - as low as $19.99 per month. At first, UC2B operated the network, but the organization later sought a private partner to manage and provide services. In 2014, UC2B chose iTV-3, Inc. as a partner to offer triple-play and to expand the network.

In late April, LD 1185 and several other broadband bills came before the Maine House Energy, Utilities, and Technology Committee. We have seen a flurry of activity in Maine this year as local communities deploy networks, develop plans, or begin feasibility studies. Likewise, the state legislature has been active as House and Senate members try to defibrillate the barely beating heart of the state listed as 49th for broadband availability.

The national providers in Maine - Time Warner Cable and FairPoint have little interest or capacity to invest in high quality services in Maine. Time Warner Cable is more focused on major metros and being acquired. FairPoint is laying off workers and also, positioning itself to be acquired. Fortunately, these big companies aren't the only option for improving Internet connectivity in Maine.

LD 1185, presented by Representative Norm Higgins, seeks to establish $6 million this year in funds for local communities that wish to deploy municipal networks. Maine already has the middle mile Three Ring Binder in place; the focus of this proposal is to help communities get the infrastructure they need to connect to it. In an effort to get the word out about the bill and grow support, Higgins and his team created this graphic explaining the proposal (a 2-page printable edition of the graphic is available for download from the link below):

Last week, the New York Times reported that the “outpouring of thoughtful and positive comments” Comcast has received for their Time Warner Cable proposed merger is much more than it’s cracked up to be. We are shocked, shocked, to learn that organizations receiving a lot of Comcast charity are endorsing its merger plans.

After a hasty staff meeting, we decided that for a mere $250,000 we too, could see the benefits of this monopolistic mega-merger. We know they ghostwrite many of their most favorable letters, but we want to save them the trouble, by providing our own glowing endorsement. 

Dear Chairman Wheeler,

After careful consideration,  we wish to share our strong support for the Comcast/Time Warner Cable merger. Firstly, we want to make absolutely clear that our endorsement of this union has absolutely nothing to do with $250,000 generously donated to our organization, no strings attached, by Comcast. After years critiquing  their slack customer service, their perennially rising prices, and their lobbying to prevent real competition, we now think a merger between the two most hated companies in America is a way awesome idea!

We support the company’s efforts to announce gigabit speeds while charging high enough prices to ensure no one calls their bluff. We hope that the merger doesn’t distract Comcast from its efforts in Philadelphia to never pay municipal property taxes or to ensure low wage workers have no sick days in the City of Brotherly Love. 

It is common knowledge that Comcast and a number of political leaders enjoy special relationships. Nevertheless, it was still a bit shocking to see the level at which Comcast's army has infiltrated the political process as uncovered in a recent Verge article.

Comcast, Time Warner Cable, AT&T, and CenturyLink lawyers and lobbyists often write legislation for lawmakers to introduce. This past summer, the puppetry went one step further when Comcast crafted letters supporting the Comcast/Time Warner Cable merger. Those letters were then submitted to the FCC from the offices of a number of politicians known to receive support from the cable giant. We applaud both Comcast and their pet lawmakers for their efficiency!

The Verge was also able to obtain email threads that document how lobbyists drafted letters of support and sent them on to local elected officials, who then made insignificant changes in the signature line or transferred the exact language on to official stationery before sending it on to the FCC.

We have taken the liberty of presenting some of the letters below. You can see a few email exchanges that detail the conversation between Comcast lobbyists and political staff.

The Verge spoke with Michal Copps, former FCC Chairman, who now advises at Common Cause:

"When a mayor of a town or a town councilman or a legislator writes in — we look at that, and if someone is of a mind already to approve something like this they might say: ‘ah-ha, see!’" says Copps, who is now an advisor at Common Cause and opposes the merger. "These letters can be consequential, there’s no question about that."

The comment process has been tainted because Comcast has also used gentle nudging to obtain support from organizations benefitting from its charitable foundation. Columbia Professor Tim Wu has studied the potential merger:

"I think they have failed to meet their burden of persuasion that this will make life better for the average American consumer…What does the average American consumer care about? They care about prices being too high. Comcast could have said this merger will lower prices and committed itself to lower prices but it has made no sign that it will do this." 

As the feds continue to evaluate the wisdom of the Comcast/Time Warner Cable merger, local communities in several states are attempting to throw a wrench in the federal approval machine.

In Worcester, Massachusetts, the City Council recently refused to approve the transfer of the city's cable television license to Comcast. In order to sweet-talk the federal agencies concerned the merger may create too much market concentration, Comcast has worked out a deal with Charter Communications to transfer customers in certain geographic areas. Charter is the current incumbent in Worcester. 

According to a Telegam & Gazette article, the City Council does not need to approve the transfer for it to take affect. Nevertheless, the City Council voted 8-3 on October 14 to urge City Manager, Edward M. Augustus Jr., not to approve the transfer of the license. If Augustus makes no determination, the transfer will automatically be approved.

The city can only examine the transfer based on four criteria including company management, technical experience, legal experience, and financial capabilities. Management and poor customer service are the sticking points for Worcester:

District 5 Councilor Gary Rosen said the City Council should not welcome Comcast to Worcester because of its "deplorable and substandard" customer service across the country. 

"It's a terrible company," he said. "In my opinion, they should not be welcome in this city. Comcast is a wolf in wolf's clothing; it's that bad. They are awful, no doubt about it. Maybe we can't stop it, but that doesn't mean we shouldn't speak out." 

A similar scenario is playing out in Lexington, Kentucky. The community is the second largest city served by Time Warner Cable in the state. They are concerned existing customer service problems will worsen if Comcast becomes their provider.

The Urban City Council drafted two resolutions denying the transfer. The resolutions had first reading on October 9. Customer service is, again, a point of contention.

This week, cities took the stage and made some very important moves to restore their local authority. From cities resisting big media mergers, to those choosing to join the new Next Century Cities initiative, it is a good time to be a part of municipal government efforts. 

Broadband Cities

Boulder, CO officials are looking ahead at their Longmont neighbor's gig network and exploring ways to make sure their own businesses are not left in the dust. Boulder’s chamber is pushing for an approval of ballot issue “2C”. Gavin Dahl of Boulder Weekly writes that the ballot question would open the way for the city to offer competitive gig services, helping the city keep existing businesses happy, and entice others to move in.

But according to Boulder News’, Erica Meltzer, opponents still seem to have their heads in the sand; The libertarian Independence Institute says if there was a market for fiber in the city, “some business” will find a way.  Maybe they think competitive, affordable Internet will just appear.

Meantime, Columbia, Missouri government officials may be facing an uphill battle. The city is exploring how to light its dark fiber infrastructure. Opponents say the plan goes against state restrictions on the city offering such services directly to customers. We believe the move would encourage competition among ISPs that would otherwise not be able to operate because of a lack of capital required to build fiber networks.

Cities choosing to keep ownership of their fiber infrastructures is often a sound decision, and North Kansas City, Missouri residents may soon be appreciating the city’s most recent announcement. In an effort to “give back” to residents, LiNKCity officials say that beginning in 2015 residential customers can get free Internet service. The decision is thanks to a unique partnership with a server farm company. 

From GovTech’s Colin Wood:

There is little doubt that our readers are aware of Chairman Wheeler's remarks on September 4th at 1776, a start-up incubator in D.C. His message echoed what policy leaders have repeated countless times - competition is lacking in the world of broadband.

Telecommunications has become a popular topic in the past few months as decision makers are discovering that constituents DO care about online access, economic development, and exessive consolidation. ILSR was pleased to see the Chairman address the issue of lack of competition and released the following statement:

The Institute for Local Self-Reliance applauds FCC Chairman Tom Wheeler’s Agenda for Broadband Competition. We feel it is a positive step coming from the nation’s top communications official.  

“These gigabit developments are positive, but they are not yet pervasive,” Wheeler said. “Looking across the broadband landscape, we can only conclude that, while competition has driven broadband deployment, it has not yet done so a way that necessarily provides competitive choices for most Americans.”

Wheeler's recognition that Americans lack a true choice in fast, affordable, and reliable Internet access is an important development. If we want real options for next-generation connectivity, local governments must be free to build then own networks. 

If there is one thing we have learned from the history of essential infrastructure, it is that local governments must have the option of building and owning it themselves. 

“Hundreds of communities have already invested in their own fiber networks, keeping money in the local economy and spurring job growth.” says Community Broadband Networks director Chris Mitchell.